Developer Bart Blatstein wants to build a complex of nearly 1,200 rental apartments in Philadelphia's Northern Liberties neighborhood in what would be his final project on a cluster of properties he began assembling in the early 2000s centered on the former Schmidt's brewery site.
Blatstein's plan for a long vacant lot at Second Street and Germantown Avenue calls for six connected buildings with 45,000 square feet of lower-story shops and restaurants around a central plaza. The project would occupy the 4.4-acre lot south of the Shops at Schmidt's retail building and across the street from the Piazza at Schmidts — now Schmidt's Commons — apartment and shopping complex, both of which he developed and later sold.
Blatstein said in an interview Tuesday that he plans to complete the project in phases over five years at a cost of more than $350 million, with groundbreaking expected by the end of March 2019. His past proposals for the lot have included 600 residential units in three buildings that were to have been called the Residences at Schmidts.
"I held this piece out for years just to see what the highest and best use" was going to be once the dust had settled on other projects in the area, he said.
The project marks what may be Blatstein's last major development in Northern Liberties, where he had been based until a move late last year to the Rittenhouse Square area. The site is his last major property in the neighborhood after a years-long sell-off of his area holdings.
On Monday, Blatstein presented plans for the site, which also includes hidden-from-view garage space for nearly 500 cars, to the Northern Liberties Neighbors Association as part of its approval process. Next comes an appearance — likely in April — before Philadelphia's Civic Design Review board, which offers nonbinding suggestions for the city's biggest development proposals. Blatstein said no variances or other zoning changes would be necessary under area land-use rules.
NLNA president Matt Ruben lauded the proposed development in an email, saying it would provide a new entry point into the former Piazza at Schmidts complex, "which is sorely needed in order to bolster and improve the commercial environment there." The development of about 500 rental units, which was acquired in 2013 by Kushner Cos. and Oaktree Capital Management LP, has at times had vacancies in its 120,000 square feet of retail space.
"This location is the perfect place — and perhaps the only major remaining location — where so many new units can go in without unduly disrupting the neighborhood," Ruben said. Despite Northern Liberties' recent rapid growth, "we still need more people to sustain the array of healthy, diverse, neighborhood-centered businesses we want."
Blatstein said he was undaunted by what have been lackluster residential occupancy rates at the former Piazza. The complex's two biggest apartment buildings, Erbe and Navona, are 77 percent and 85 percent filled, well below citywide averages that run between 90 and 95 percent depending on neighborhood, according to data from the CoStar Group, a real estate market tracker.
Blatstein attributed that performance to sub-par management of the building under its current ownership and said demand should be higher for the mix of studio and one-bedroom units he plans at his new buildings. Prices there are expected to average around $2.50 a month per square foot, or about $1,800 for a large one-bedroom unit, he said.
The former Piazza's retail and residential fortunes, meanwhile, should both benefit from the link that the new development would forge between that complex and the commercial district around Girard Station for SEPTA's Market Frankford Line train, Blatstein said.